HMV Group's struggles continue as sales fall below £1bn

Rocked by competition from MP3 downloads, the HMV Group has reported a loss of £80.4m for the full year ended 28 April 2012. The British entertainment retail chain, which operates 252 stores, saw revenues fall by 20.8 per cent to £873.1m (2011: £1.1bn). It posted a pre-tax loss of £38.6m, compared with the previous year's flat figure. Operating loss was £15m (2011: operating profit of £9.8m).

HMV Retail’s total sales declined by more than a fifth (20.8 per cent at statutory exchange rates), including a like-for-like sales decline of 12.1 per cent.

Core UK entertainment markets declined in value over the period, with physical music down 19 per cent, DVDs down 13 per cent and games down 17 per cent.

HMV Live sales, meanwhile, totalled £50.1m, with an operating profit of £1.8m.

Simon Fox, chief executive of HMV Group, said:

The last year has been a difficult and challenging one for HMV and, as expected, this is reflected in our annual results. However, we are confident that the actions we have taken will enable us to significantly improve cash generation and make profits of at least £10m in the year ahead.

Although we have clearly been through a turbulent period, our financial position is now stable thanks to the support of our suppliers, banks and colleagues, and I am confident, as I hand over the reins to Trevor Moore, that HMV has a secure future under his leadership.

HMV's new CEO, Trevor Moore, and group finance director, Ian Kenyon, will take charge on 3 September.